The Rise of Morning Brew and The Hustle: Lessons from Building Million-Dollar Newsletter Businesses

The Early Days of Morning Brew and The Hustle

In 2015, Alex Lieberman and Austin Rief started Market Corner, which would eventually become Morning Brew, while they were still in college. Their initial goal was to create a business newsletter that college students would actually enjoy reading. At the same time, Sam Parr launched HustleCon, an event that made around $400,000 in revenue and $200,000 in profit.

Morning Brew's Humble Beginnings

Alex and Austin started with a PDF newsletter attached to an email list. They had no revenue in their first year, which they saw as an advantage:

"We basically had a year and a half to two years of like fake timeline where we didn't have to worry about bringing in revenue," Alex explained.

The Hustle's Early Success

Sam Parr, on the other hand, started with events and had immediate success:

"That year I think it had made around $400,000 in revenue and like $200,000 in profit," Sam recalled. "It was like a good event but we and it was basically like a TED talk for entrepreneurs."

The Newsletter Business Model

Both companies saw the potential in the newsletter business model, inspired by successful predecessors like theSkimm and Thrillist.

The Simple Math Behind Newsletters

Austin explained their thought process: "So many people came to us and they would say like this is so stupid. Why are you doing this newsletter thing? It makes no sense. But Alex and I would sit there every night and we'd go through a spreadsheet and it was the most basic spreadsheet of you know newsletter subscribers grow five or 10% a month and CPMs stay flat and over time you can get to hundreds of thousands or millions of dollars of revenue a month."

Competitive Advantage in Media

The founders realized they had an advantage in the media industry. As Austin put it, "I think we picked the industry with a lot of suckers. There are a lot of people who started 5 or 10 years before us and they just weren't smart. They were doing the same thing that they did for 10 years."

Growth and Revenue Milestones

Both companies experienced significant growth over the years:

Morning Brew's Growth

• 2016: $25,000 in revenue, first ad deal
• 2017: 100,000 subscribers, $300,000 in revenue
• 2018: Grew from 100,000 to 1 million subscribers
• 2019: 2 million subscribers, $13.1 million in revenue, $3 million in profit
• 2020: Sold to Axel Springer for a reported $75 million

The Hustle's Growth

• 2016: 400,000 in revenue, 100,000 subscribers
• 2017: 250,000 subscribers, $2.2 million in revenue
• 2018: 500,000 subscribers, $5.1 million in revenue
• 2019: 1.2 million subscribers, $8 million in revenue
• 2020: Sold to HubSpot for a reported $27 million

Key Lessons and Strategies

Focus on Content Quality

Both companies emphasized the importance of high-quality content. Alex described their process: "We printed the newsletter out every day and we were maniacal over the content."

Niche Down

Alex advised: "The more niche the better. The internet is just this long tail of millions of niches and the more niche you go, especially if you pick the right niches, not only can you get higher CPMs... but the other part about it is you know the trouble we had at Morning Brew which I think you had less of at The Hustle is we didn't know we could not figure out how to monetize our audience directly."

Location Matters

Being based in New York was a significant advantage for Morning Brew. Austin explained: "If you want to build a big brand in media, you have to be where the ad agencies are."

The Importance of Having an "Enemy"

The founders discussed how having a perceived competitor or "enemy" can be motivating, even if it's not entirely real. Austin said, "Having an enemy was so helpful even if it's made up."

Challenges and Lessons Learned

The Impact of COVID-19

Both companies faced significant challenges during the early days of the COVID-19 pandemic. Alex recalled: "In a period of a few weeks, 30% of all revenue that we had booked vanished."

The Acquisition Process

The founders shared their experiences with the acquisition process, describing it as intense and emotionally challenging. Sam said, "The sales process that was the most intense part of my life. It was horrible."

Future Opportunities in Media

The founders discussed potential opportunities for aspiring media entrepreneurs:

Physical Media Comeback

Sam suggested: "Quarterly or monthly hardcover magazines or some type of physical newsletter."

Niche Content with Monetization Potential

Alex emphasized the potential in creating niche content that can be directly monetized: "The more niche you go, I think the more clear it becomes how you can directly monetize your audience."

Alternative Investments Media

Alex proposed: "A media company focused on alternatives... Like alternative investments. So like real estate, private equity, venture, etc."

Sports and Entertainment

Austin highlighted the potential in creating content-driven businesses that can compete with established industries, citing Overtime as an example.

Conclusion

The journeys of Morning Brew and The Hustle demonstrate the potential for success in the newsletter and media space. While the landscape has become more competitive, opportunities still exist for those willing to focus on quality content, niche markets, and innovative monetization strategies. As the media industry continues to evolve, entrepreneurs who can adapt to changing consumer preferences and leverage new technologies will be well-positioned to build successful businesses.

Article created from: https://www.youtube.com/watch?v=6X64f1AndtM